Top 10 Things Tenants Should Know About Real Estate (and most don’t).
#9 Determining your space needs
Before you begin the process of site selection for your business, it’s essential to define exactly what your needs are.
You’ll get a head start if you spend the time to physically list those things that are both important and necessary in the space you occupy. This will help clarify for both you and your broker, exactly what you are looking for. A good broker can help you think through all of the issues.
Start by answering this series of general questions:
- What geographic area (part of town) do I want to be in?
- Are there particular buildings I like or dislike?
- How important is a view from my office windows?
- How many people will be in the office?
- What are our parking needs?
- What are our access needs?
(Stairways, elevators, loading docks)
- What is our budget for occupancy costs?
(Be sure to include all occupancy costs such as reimbursable expenses, utility costs, janitorial etc.)
- What is my business plan for the next 5 years… do I plan to expand, contract, remain status quo?
Once you determine these general needs, it’s time to narrow down exactly what your space requirements will be. Again, here are some questions you’ll need to answer:
- How many private offices do we need and how large do they need to be?
- How much open space do we need for work stations, reception area, display or retail area, etc.?
- Do we need a conference room, storage space, a work room, break room?
- How many file cabinets do we need/have and how large are they? Other storage needs?
- Do we have extra electrical requirements?
- What are our communication needs (DSL, T-1, regular phone, etc.)?
- Do we have any particular HVAC needs?
- What works and what doesn’t in the space you have now?
These questions simply help to clarify any specifics your company will be looking for in their leased space, and saves everyone valuable time. We also suggest sitting down with a space planner and doing a “bubble” diagram of your ideal space. This hour will save many hours of frustration down the road.
Next you will need to determine how many square feet of space you need. The following chart will help you figure out more accurately, how many square feet of space you will be looking for.
|Useable SF per Person
250 - 400
150 - 250
100 - 150
50 - 100
25 - 30
100 + 25/Guest
50 + 15/Person
|# of People
Hallways, corridors and other common areas within your space.
Lobbys, restrooms, hallways, etc. More on load factors next month.
Total RSF Needed
Keep in mind that leases are usually for 3, 5 or 10 years. Think about the term of the lease you want and then how your space needs may change during that period.
A recent client wanted to save some money in occupancy costs. We asked them all these questions, got a feel for their business plan for the future, and were able to help them consolidate their manufacturing, warehouse, showroom and office space to one facility. Not only have they streamlined their entire company, but we helped them analyze their current and future space needs and helped them get great lease terms that will allow them to grow over the next 10 years.
Determining what’s important as far as space needs and requirements for you and your business, is a vital step toward a successful lease. To go forward without this basic groundwork would be like trying to decide what car you like by driving every car on the lot, from oversized SUV’s to mini-compacts. Your space should support your business and give you flexibility.
A little homework now will save you time and money!!